Insurance policies are known in the art and comprise complex agreements that specify items to be afforded coverage with respect to particular perils. An insurance policy almost invariably extends coverage for a predetermined period, during which claims can be made for covered losses. As a result, insurance policies rely heavily on accurate treatment of time periods, coverage amounts, and other policy details. The policy period is usually one year (though other periods are contemplated), and policies are generally renewed on an annual basis, with a new policy period starting at the end of the previous period. In some cases, changes to a policy coincide with the annual renewal, but in many cases changes occur mid-term. As a result, the effective date of a policy change may not coincide with the start or end of the policy period.
The effective date of a policy change is the date on which the change becomes legally effective and can comprise a present, retroactive, or future date. The change or model date of a policy change is the date on which the change was actually made, in real time. The change date will often be different from the effective date. Changes to a policy, whether at renewal or mid-period, may trigger a series of follow-on computations, one of which is often a recalculation of the total cost of the policy to reflect the changes and the amount of time remaining in the policy period. For purposes of calculating a premium, insurers need to know what coverages were, are, or will be in effect for what durations. In addition, for purposes of evaluating a claim, insurers need to be able to determine what coverages were in effect as of the date of the claim. Further, insurers need to known when the coverages were changed, when the change went into effect, and what changes were made when evaluating claims to help guard against potential fraud.
The ability to make changes with effective dates forward and backward in time can lead to many difficulties that have not been satisfactorily addressed by any existing implementations. A concern for many insurers is that the ability to make retroactive revisions to a policy may encourage people to retroactively seek coverage for a loss after the incident occurred. Further, the ability to make changes forward and backward in time may become complicated because a number of changes may be made with different effective dates and different change dates. Thus, it is not enough to record only the effective date of each change. At times the insurer will also want to analyze the policy based on the change or model date. An insurer needs to be able to ask not only what was effective as of the date of loss, but also what changes had been made as of that date. Such information may be particularly helpful when detecting fraud or in creating a trail for audit purposes. Therefore, there are two dimensions of time that should be represented with each change (the effective date and the model date of that change) and used correctly by the policy management application.
Existing systems do not adequately address the concerns presented by multiple policy revisions and revisions with different change and effective dates. Systems often have difficulty saving both the information concerning what policy elements were effective on a certain date and when those elements were changed. As a result, it is difficult to discern both the policy change date history and the policy effective date history, and to use that information to make automated coverage and pricing decisions. In many cases, all information about the actual change date (when the change occurred in real time) is lost or greatly obscured, preventing the ability to detect fraud and track audits, as discussed above. Instead, only the effective date of the change is preserved and the system can only determine the current legally binding terms for an effective date, without being able to reconstruct the legally binding terms for previous policy changes. Previous solutions to the problem of policy revisioning have stored the policy as a plurality of discrete temporally-sequential policy revisions that have an effective date and a change date stored therewith. Thus, when reviewing the policy as a whole at a particular date, each of the policy edits were processed for their impact on the policy to recreate a whole policy. Depending on the size and type of the insurance policy, constructing the policy from such discrete temporally-sequential policy revisions can be cumbersome and time consuming. In addition, such a system may make certain types of changes difficult to implement in an efficient manner. For example, for certain commercial insurance policies changes often happen across the term of the policy and such changes were difficult because creating such discrete temporally-sequential changes could become quite time consuming. As a result, current approaches to handling insurance policy revisions do not satisfactorily address the concerns presented by various policy changes, policy evaluation including determination of the legally binding policy, and the tracking of change dates and effective dates.
Skilled artisans will appreciate that elements in the figures are illustrated for simplicity and clarity and have not necessarily been drawn to scale. For example, the dimensions and/or relative positioning of some of the elements in the figures may be exaggerated relative to other elements to help to improve understanding of various embodiments of the present invention. Also, common but well-understood elements that are useful or necessary in a commercially feasible embodiment are often not depicted in order to facilitate a less obstructed view of these various embodiments of the present invention. It will further be appreciated that certain actions and/or steps may be described or depicted in a particular order of occurrence while those skilled in the art will understand that such specificity with respect to sequence is not actually required. It will also be understood that the terms and expressions used herein have the ordinary technical meaning as is accorded to such terms and expressions by persons skilled in the technical field as set forth above except where different specific meanings have otherwise been set forth herein.